S&P500: The time has come for the bears

FXStreet Team FXStreet

American stock indices try to fall in an organized way after two halts due to excessive losses while the technical puzzle begins to square with a long-term scenario, post-bull market 2009-2020. Any order should be placed with very tight stops and a decision to execute them, Tomás Sallés from FXStreet advises.

Key quotes

“We see that this first bearish move has taken the price straight down to the 23.6% retracement level of the entire rally since 2009. The fact that the first major downturn has stopped here gives validity to the big scenario.”

“In the DMI indicator, we see how bears have reached a level only surpassed during the fall of Lehman Brothers, and we have gotten really close to that point.

“According to traditional theories, bear markets last between 1/4 and 1/3 of the duration of the previous bull market. If this happens this time, we can be talking about two-to-three years of a bearish market.

“It is essential to give yourself time before you go looking for bargains. In panicked markets, selling irrationality can outweigh the buying irrationality by some degrees of magnitude.”

Author

FXStreet Team

FXStreet

Composed of a group of economic journalists and FX experts, the FXStreet content team produces and oversees all content published on FXStreet. It provides a purely journalistic approach to the Forex market.

AUD/USD languishes near two-month low amid renewed Iran tensions

AUD/USD holds above 0.7000 during the Asian session on Wednesday, though it remains close to a nearly two-month low set the previous day. Fresh US strikes on Iran temper hopes for a peace deal and benefit the safe-haven US Dollar. Furthermore, inflationary concerns continue to fuel hawkish Fed expectations, lending additional support to the buck ahead of the US CPI report. Adding to this, reduced bets on an RBA rate hike in June cap the currency pair.

USD/JPY sits near 160.50 intervention zone as bulls shrug off Japan's strong PPI

USD/JPY consolidates just below mid-160.00s, or its highest level since late April, as economic concerns stemming from the Middle East conflict continue to undermine the Japanese Yen (JPY). Furthermore, a fresh wave of US strikes on Iran benefits the safe-haven US Dollar and acts as a tailwind for the currency pair, countering Japan's hotter-than-expected PPI report. However, intervention fears cap the upside as traders seem hesitant ahead of the US consumer inflation figures later this Wednesday.

Gold flirts with $4,200, lowest since March 23 on hawkish Fed bets

Gold drops to a fresh low since March 23, around the $4,200 mark during the Asian session on Wednesday, as fresh US strikes on Iran fuel inflationary concerns and bolster bets for more hawkish central banks, including the US Fed. Meanwhile, US Dollar bulls are turning cautious ahead of the US CPI report, which could limit bullion losses. However, the recent breakdown below the 200-day SMA suggests that the path of least resistance for the XAU/USD is to the downside.

Bitcoin sell-off pushes over 50% of circulating supply into loss, hinting at market bottom

Bitcoin dropped near $61,000 on Tuesday, with the latest sell-off pushing long-term market indicators toward levels historically associated with bear-market bottoms, according to a report by K33 Research.

When the chips are down, the AI tape starts to shake

The market came into Tuesday trying to sell investors the comforting ”Turnaround Tuesday” idea that Friday’s AI fracture was just another pothole on the road higher. By the close, that story had lost its bid. Monday’s dead cat bounce had done what dead cat bounces always do.

The US economy defies the rules: 100 days into the Oil shock and the recession signal is still missing

More than three months after the start of the Iran war and the resulting disruption to global energy markets, the US economy continues to display remarkable resilience. The conflict has triggered a sharp rise in Oil prices, reignited inflationary pressures and fueled widespread concerns about a potential economic slowdown.